Direct Line Insurance Group saw its share price drop 1% in early morning trading on Tuesday as it released mixed financial results for 2021 with one-off costs offsetting a rise in operating profit.
The company reported an operating profit increase of 11.4% to £581.8 million against £522.1 million in 2020.
Direct Line Insurance further reported a pre-tax profit decrease of 1.2% to £446 million against £451.4 million in 2020.
“Direct Line has had a strong end to the year. Especially considering price reforms and a challenging wider backdrop, the reiteration of targets is no mean feat,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
“With more people back on the road following lockdown, motor claim frequency crept back up to normal levels in the second half, which isn’t unexpected.”
The company blamed the decline in profit on a £62.1m increase in restructuring and one-time costs reflecting property portfolio restructuring, alongside the purchase of its Bromley office in 2021.
The Group distributed an interim dividend per share of 7.6p against 7.4p in 2020, alongside a final dividend of 15.1p against 14.7p in 2020.
“Operating profit has increased to £582 million, own brands policies grew as our Home, Commercial and Rescue businesses performed strongly, whilst in Motor we steered a smart path through another uncertain period as the market sought to predict the impact of Covid-19,” said Direct Line CEO Peter James.
“2021 has been a year of significant strategic progress – we’ve successfully completed the main elements of our technology build and data capability, both key enablers of future growth.”
“Our new motor platform is improving our competitiveness, we’ve announced a new partnership with Motability Operations that is expected to see over 640,000 customers join us in 2023 and we’ve extended our Home partnership with NatWest Group until 2027.”
